News release: August 25th, 2017
—San Diego, Calif.—
The global environmental industry generated revenues of $1.16 trillion on 3.5% growth in 2016 with developing markets setting the pace of growth, but not to the extent they have in the past decade, according to Environmental Business Journal (EBJ).
EBJ’s latest research on global environmental markets reveals that the United States is the world’s largest environmental market with $363.7 billion in revenues and 32% of the global total in 2016. Western Europe follows with 27% share of the environmental market worldwide, Japan ranks third with 10% share, and the Rest of Asia represents 13%.
With the global slump in demand for resources, the fastest growing environmental markets have been in the growing manufacturing economies of Asia including India, China, the Philippines and Indonesia. The Chinese environmental market is estimated by EBJ at $68 billion in 2016 with close to 9% growth, but still poses challenges for global companies.
The environmental industry is comprised of 14 segments with Solid Waste Management, Wastewater Treatment Works and Water Utilities accounting for 43% of revenues globally, a still significant percentage of which are generated by the public sector in these three segments. Clean Energy Systems & Power now represents 20% of the total global market, up from less than 5% as recently as 2004. Environmental Consulting & Engineering, a core environmental service segment, totaled $72 billion worldwide in 2016.
Global Market Drivers Shift From Resources To Infrastructure
According to EBJ’s special biennial edition, despite continuing low oil prices and weaker demand for mined resources, at least half the market for environmental service companies internationally is related to energy or resource development and extraction. However, drivers of environmental work internationally are shifting, and the share of work related to energy and resources has declined in favor of work driven by global corporations and by urbanization and the need for infrastructure.
“Whereas historically international business development strategies have gone where resources and regulations dictated, this will no longer sustain market advantage for leading players,” said Grant Ferrier, president of Environmental Business International Inc. (EBI), publisher of EBJ. “The imperatives of infrastructure investments and planning, building and networking the cities of the future represent expanding opportunities and color the strategic outlook for the global environmental industry.”
Since 2011, environmental industry growth has exceeded global GDP growth by about half a percentage point. Presuming that regional and energy & resource markets regain a more secure footing, EBJ’s forecast calls for 3-4% annual growth in global environmental markets in 2017 and 2018.
EBJ’s Global Environmental Markets 2017 edition breaks down revenues by region, country and by 14 market segments. The global environmental consulting and engineering (C&E) market stood at $69 billion in 2015 to which U.S. firms contributed $30 billion. The top four largest U.S. environmental C&E firms generated 34% of their revenues internationally, and the 45 U.S. environmental C&E firms with revenues of $100-999 million generated 25% of their business overseas.
Regional Prospects, Global Clients, and Biggest Obstacles
The global edition of EBJ also features the results of EBJ’s Global Markets Survey 2017, offering insights into regional prospects for global markets, demand from 24 global client markets, and the opportunities and pitfalls of conducting business internationally.
When asked to rank the biggest obstacles to doing business in Developed Countries the top 5 were:
1. The cost of doing business internationally;
2. Company licensing or certification requirements;
3. State-trading monopoly or state monopoly control of imports;
4. Too much local competition; and
5. Subsidies or tax benefits for competing domestic firms.
The biggest obstacles in Developing Countries were:
1. Contract “risk” of non-payment;
2. Inability to collect;
3. Business or asset ownership restrictions;
4. Safety and security;
5. Lack of intellectual property protection; and
6. Informal “payments” required to conduct business.